Overlapping generations model: Difference between revisions

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{{For|the topic in population genetics|Overlapping generations}}

An '''overlapping generations model''', abbreviated to '''OLG model''', is a type of representative agent [[economics|economic]] model in which [[Agent (economics)|agents]] live a finite length of time long enough to overlap with at least one period of another agent's life.

All OLG models share several key elements:

*Individuals receive an endowment of [[good (economics)|goods]] at birth.

*Goods cannot endure for more than one period.

*[[Money]] endures for multiple periods.

*Individual's lifetime [[utility]] is a function of [[Consumption (economics)|consumption]] in all periods.

The concept of an OLG model was inspired by [[Irving Fisher]]'s monograph ''The Theory of Interest''.<ref name="ABB29" >{{harvtxt|Aliprantis|Brown|Burkinshaw|1988|p=229}}:<p>{{cite book|last1=Aliprantis |first1=Charalambos&nbsp;D.|authorlink1=Charalambos D. Aliprantis| last2=Brown|first2=Donald&nbsp;J.|last3=Burkinshaw|first3=Owen|title=Existence and optimality of competitive equilibria|chapter=5 The overlapping generations model (pp.&nbsp;229–271)|publisher=Springer-Verlag|___location=Berlin|date=April 1988|edition=1990 student|pages=xii+284|isbn=3-540-52866-0|mr=1075992}}</ref> Notable improvements were published by [[Maurice Allais]] in 1947, [[Paul Samuelson]] in 1958, and [[Peter Diamond]] in 1965.